JAKARTA: Indonesia posted its widest monthly trade deficit in history in April as exports slumped, while the pace of fall in imports was slower than expected, data from the statistics bureau showed on Wednesday (May 15).
The resource-rich country booked its first trade deficit in three months at US$2.5 billion in April, and it was the widest ever, according to Refinitiv Eikon data.
This compared with a median forecast of US$500 million deficit in a Reuters poll and a US$671 million surplus a month before.
The data makes the central bank even less likely to ease monetary policy in the near term, said Wisnu Wardana, Bank Danamon's economist in Jakarta.
"We think there's a slim chance of shift in monetary stance for the time being," he said.
Bank Indonesia (BI) has been pressured to cut interest rates after the US Federal Reserve turned dovish and Indonesian data, including benign inflation and weakening gross domestic product (GDP) growth, augur well for such a move.
But officials have been saying they want to see significant reduction in Indonesia's current account deficit - which shows trade in goods and services - before making any cut.
BI targets to shrink the current account deficit to 2.5 per cent of GDP this year, from 3 per cent in 2018.
All 20 analysts in a separate Reuters poll forecast BI to keep its main interest rate unchanged for a sixth straight policy meeting on Thursday, as rising US-China trade tensions renew pressure on the rupiah.
There was little reaction in the rupiah spot market after the larger-than-expected April trade data, but the main stock index extended its losses.
April exports were down 13.10 per cent on an annual basis at US$12.60 billion, led by a drop in shipments of refined oil and natural gas products. The poll had estimated a 7.15 per cent contraction.
Exports of Indonesia's main commodities, coal and palm oil, also sank.
Imports fell 6.58 per cent from a year earlier to US$15.10 billion, versus a 12.1 per cent drop expected in the poll.
On a monthly basis, imports of food like frozen beef, soybeans and fruits rose as the Muslim-majority country prepared for the fasting month of Ramadan.
The statistics bureau chief Suhariyanto warned there could be more challenges coming forward.
"The challenges in 2019 are extraordinary, the global economy is weakening, our trade partners as well. So like it or not, we will be affected," he said, noting that Beijing's trade war with Washington has also increased uncertainty.
China, Indonesia's biggest trade partner, contributed US$1.9 billion to the deficit in April. Indonesia had a US$704 million surplus in its trade with the United States in the same month.